Extended limitation under Customs law requires proven intent to evade duty; without suppression, consequential penalty fails.

Extended limitation under the Customs Act could be invoked only on proof of wilful misstatement or suppression of facts with intent to evade duty, and the same standard governed penalty. On the record, the import documents described the goods as software for the LRSAM system, the importer was a defence public sector undertaking, and there was no material showing deliberate suppression or conscious intent to evade duty. The adjudication was therefore set aside on limitation, the consequential penalty could not survive, and the merits of the claimed exemption were left undecided.

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Issues: (i) Whether the extended period of limitation under section 28(4) of the Customs Act, 1962 was rightly invoked, and the consequential penalty could be sustained.

Analysis: The demand was founded on an allegation that the appellant had misdeclared the imported CD containing software as an integral part of the LRSAM System and thereby sought exemption under the notification. The record showed that the import documents described the goods as software for the LRSAM System, the appellant was a defence public sector undertaking, and there was no material to establish deliberate suppression of facts or a conscious intent to evade duty. For invocation of the extended period, the element of wilful misstatement or suppression with intent to evade duty had to be shown, and the same standard governed the imposition of penalty.

Conclusion: The extended period of limitation was not sustainable, and the penalty could not survive.

Final Conclusion: The impugned adjudication was set aside and the appeal succeeded on the limitation issue, leaving the merits of exemption undecided.

Ratio Decidendi: The extended period of limitation under the Customs Act can be invoked only when deliberate suppression or misstatement with intent to evade duty is established; in the absence of such intent, a consequential penalty based on the same foundation is unsustainable.

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